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Diagonal dominance and global stability

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  • Keenan, Donald C.
  • Kim, Taewon

Abstract

We show that a natural weakening of diagonal dominance resolves the incompatibility of its standard formulation with the tatonnement of competitive market economies in the presence of either zero-degree homogeneity or Walras’ Law. It thus yields global stability of such unnormalized tatonnement, in addition to normalized tatonnement, just as do the WARP and gross-substitutes conditions of economic theory.

Suggested Citation

  • Keenan, Donald C. & Kim, Taewon, 2013. "Diagonal dominance and global stability," Mathematical Social Sciences, Elsevier, vol. 65(3), pages 217-221.
    • Handle: RePEc:eee:matsoc:v:65:y:2013:i:3:p:217-221
    DOI: 10.1016/j.mathsocsci.2012.11.006
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    References listed on IDEAS

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    1. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    2. Dohtani, Akitaka, 1998. "The system stability of dynamic processes," Journal of Mathematical Economics, Elsevier, vol. 29(2), pages 161-182, March.
    3. Keenan, Donald C., 2001. "Aggregate Substitution Effects Implying Global Stability," Journal of Economic Theory, Elsevier, vol. 101(1), pages 317-329, November.
    4. Dierker, Egbert, 1972. "Two Remarks on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 40(5), pages 951-953, September.
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    Cited by:

    1. Jean-Sébastien Lenfant, 2018. "Substitutability and the Quest for Stability," Working Papers hal-01764115, HAL.

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